First Nations can prosper through resource development

Tom Flanagan is professor emeritus of political science at the University of Calgary and a senior fellow of the Fraser Institute. He is the author of a newly released report, The Community Capitalism of the Fort McKay First Nation.

Located in northern Alberta in the heart of the oil sands, the Fort McKay First Nation is an outstanding example of community capitalism in action. Its business portfolio generates gross revenue of about $500-million a year and creates about 2,000 jobs. Only about 5 per cent of its annual net income is derived from government transfers; the other 95 per cent is own-source revenue from business activities.

And the wealth is shared. Fort McKay's Community Well-Being Index, based on income, employment, housing quality and education, has steadily risen until it is almost as high as the average for all Canadian communities. The average aftertax income for Fort McKay residents was $73,571 in 2015 – significantly higher than for Alberta ($50,683) and Canada ($38,977). This is an outstanding achievement for a First Nation whose people just a generation ago were hunters and trappers in a remote wilderness area.

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All this has been done without producing a drop of oil or earning a dollar in royalties. Fort McKay has prospered by selling services to oil sands corporations, starting with janitorial care, then expanding into trucking, earth moving, well-site maintenance, and work force lodging. In short, they seized the opportunities presented by one of the biggest industrial developments on the planet.

Initially, the people of Fort McKay were skeptical about development. In 1983, they erected a blockade to stop the heavy trucks rumbling through their village. But around that time they also realized that their old way of life based on hunting and trapping was passing away. Faced with the stark choice of pursuing new opportunities or becoming dependent on the Canadian welfare state, they opted for the path of self-supporting independence.

Fort McKay's story is of national importance because participation in resource development is the most promising road out of poverty for hundreds of First Nations located in remote areas. Urban First Nations can thrive by building casinos, hotels, shopping centres and residential developments. But for many remote First Nations, oil and gas, minerals, forestry and fisheries are the best hope for prosperity.

Unfortunately, Canadian governments at all levels are now frustrating such opportunities. The federal government has prohibited drilling for oil in the Arctic and shipping oil off the northern coast of British Columbia. The government of British Columbia as well as local municipalities are trying to block the Trans Mountain pipeline. British Columbia has also managed to impede the export of liquefied natural gas, even as Americans have enthusiastically entered the field; the government of Ontario has not managed to advance the "Ring of Fire" mining development in the province's north.

Each of these obstructed developments would benefit dozens of First Nations; together they could make a vital difference for hundreds. The federal government is increasing spending for Indigenous Affairs, but that is small change compared with what the private sector would bring to Indigenous people if given the chance. As Jim Boucher, chief of the Fort McKay First Nation has said, "The government has only a couple of hundred billion dollars in their spending budget and that's small compared to the Canadian economy, which generates trillions of dollars."

Opportunity is fleeting. If you don't grasp it, it slips away. Other countries will supply the world's need for natural resources if Canada does not. And once again First Nations will be the losers.

Let's give the last word to Niccolo Machiavelli, who was a gifted poet as well as a great political analyst: "Few know me, Opportunity am I / The reason that I never can be still / Is because on a wheel my foot does lie."

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The image of opportunity balancing on fortune's wheel is as valid now as it was in Machiavelli's time. Embrace Opportunity or she slips away.

Premier Rachel Notley says a task force will advise Alberta on possible next steps in a trade spat with B.C. over the Trans Mountain pipeline expansion.The Canadian Press

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